Roundup of the weekly news and developments from the global insurance market with stories from Cobalt, Manchester Underwriting, Beazley and more.
Cobalt Insurance to launch Lloyd's first sharia-compliant syndicate
London-based Cobalt Insurance have confirmed they have been given "in principle" approval from Lloyd's of London to set up the specialist insurance market's first sharia-compliant syndicate. Cobalt, which formed in 2012 with funding from Capita insurance services and the Bank of London and the Middle East, announced it wanted to start underwriting in the first quarter of 2017. The syndicate, which will be managed by Capita Managing Agency, will develop a property and specialty-focused book of commercial business from emerging and developing markets in the Middle East, North Africa and Asian regions. Cobalt founder Richard Bishop said, "The aim of the syndicate is to look to underwrite new business from emerging markets and in doing so working with others in Lloyd's to extend their participation in those markets.” Under sharia law, firms or individuals are not allowed to charge interest or fees for loans. The Islamic insurance or takaful industry is based on the concept of mutuality, where a company oversees a segregated pool of funds contributed by all policy holders.
Manchester Underwriting Management hire investment bank to raise funds
Manchester Underwriting Management have brought an investment bank on board to raise around £5mn to be put towards a new underwriting and broking team with the remainder going to finance a new M&A. It has been reported that Hines Associates have been chosen to raise the money needed. Although the process has only just begun it is believed that Hines Associates have put forward an investor memorandum and sent it to brokers and carriers. Manchester Underwriting Management is majority owned by CEO Charles Manchester who is open to the idea of selling some of his shares to contribute to the total.
Matthew Holmes is set to leave Beazley
Matthew Holmes, Beazley’s head of energy, is set to leave the company to pursue other opportunities. Holmes joined Beazley in 2011 replacing Paul Dawson, prior to this he served at Catlin as a class underwriter covering casualty risks in upstream and downstream energy. Alex Barnes, presently at Beazley, is expected to be promoted to replace the outgoing Holmes. Last year Beazley wrote $68.1mn of energy business and has the ability to hold major capacity. It is a lead market in the London energy upstream market despite a challenging few years due to large catastrophe exposures faced across the market.
Scott Maries hired by Arch to grow legacy vehicle
Scott Maries will join Arch to work on its run-off vehicle, joining from Validus where he held a corporate development role. Maries brings a wealth of experience in developing and growing hedge fund reinsurers to the board of executives. Maries had previously helped to develop Enstars total return reinsurer project, Aligned Re, before joining Validus. He also spent time at JP Morgan working on the Watford Re venture with Arch which is believed to be the inspiration for the new venture Maries will be involved with at Arch. Legacy operations have proved popular with total return reinsurers as they offer a natural distribution model. This kind of move can provide sizable returns with many opting to reinsure long term but stable portfolios to generate the best outcomes.
Steve Warwick to launch new reinsurer in Hong Kong
Steve Warwick, former Aon Benfield Greater China CEO, is planning on setting up a new reinsurer based in the Hong Kong market. Chinese investment group, First Seafront Financial, have supported the move and injected $500mn for a launch in April of next year. For the new operation to start selling its products it will need approval from the Hong Kong regulator. The new operation is understood to be called Nine Merchants Re and Warwick is believed to be working hard to acquire an A-financial strength rating from AM Best. The initial focus of the operation will be in treaty business from the Asia Pacific and a few global accounts. Warwick previously served as head of treaty for the Asia Pacific at Aon Benfield before becoming Greater China CEO from 2012 to 2015.
AIG to sell Latin American, Central and Eastern European businesses to Fairfax
American International Group Inc. (AIG) has confirmed it has agreed to sell Latin American, Central and East European businesses to property and casualty insurer Fairfax Financial Holdings Ltd., in an acquisition valued at $240 million. AIG will part with its local commercial and consumer insurance operations in Argentina, Chile, Colombia, Uruguay, Venezuela, and Turkey. Fairfax will also adopt renewal rights for the local business written by AIG's operations in Bulgaria, Czech Republic, Hungary, Poland, Romania, and Slovakia and assume AIG's CEE operating assets and employees. Peter Hancock, AIG president and chief executive officer, has hailed the sale as furthering AIG’s strategic goal of streamlining on major economies that it believes provide the greatest profitable growth and the opportunity for AIG’s commercial or consumer insurance divisions to achieve and maintain scale. AIG reiterated that it is committed to its multinational capabilities for individuals and companies that operate globally. Hancock said, “This partnership marks a significant step forward in achieving the strategic priorities of AIG, as well as Fairfax.”
Ailsa King hired by Marsh
Marsh has appointed Ailsa King as chief client officer for the UK and Ireland. King joins Marsh from Willis Towers Watson, where she spent 25 years most recently as head of UK client and business development. In her new position she will report to UK and Ireland chief executive Mark Weil. She is expected to take up the role in the second quarter of 2017. King will operate across Marsh’s operations and will also work closely with executives from Marsh and McLennan’s operating companies, Guy Carpenter, Mercer, and Oliver Wyman, on key client initiatives. Weil said: “Ailsa’s significant industry experience and deep client relationships will ensure that our clients will continue to be at the centre of our strategic efforts and that their views will be represented at the highest level within our firm.”